Italy May Designate Telecom Italia’s Access Network as Strategic

Italy may designate telecommunication networks as strategic assets after Spain’s Telefonica SA (TEF) agreed to boost its stake in Telecom Italia SpA (TIT), according to a draft of a decree that could be discussed at a Cabinet meeting today.

Access networks such as Telecom Italia’s would be considered “strategic,” giving the government a say in an eventual change of ownership involving a foreign buyer. If approved, the new rules would also apply to electricity and gas grids, as well as railways, ports and airports.

Telefonica, already Telecom Italia’s biggest shareholder, tightened its grip on the carrier this week by agreeing to a $1.2 billion cash-and-stock transaction to gradually acquire control of Telco SpA, the holding company that owns 22.4 percent of the former phone monopoly.

The government could intervene in cases that represent a “serious” threat for security, supply or continuity of operations, according to the decree obtained by Bloomberg News.

Maurizio Decina, a former member of Italy’s telecommunications regulator AGCOM, said the government should include not only access grids as strategic but also metropolitan and long-distance networks.

Transport Minister Maurizio Lupi told Radio Anch’io in an interview that “it’s important to make a distinction between the network and the service management. The second one is absolutely free on the market, while the first one must obviously be under public control.”

The government is also studying changes to the country’s takeover law that might lower the threshold for mandatory bids from the current 30 percent, Finance Undersecretary Alberto Giorgetti told a Senate hearing this week.

To contact the reporters on this story: Chiara Vasarri in Rome at cvasarri@bloomberg.net; Daniele Lepido in Milan at dlepido1@bloomberg.net

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net

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